Performant Financial Corporation (Nasdaq: PFMT), a leading
provider of healthcare payment integrity services, today reported
the following financial results for its second quarter ended June
30, 2024:
Second Quarter Financial Highlights
- Healthcare revenues of $27.9 million, compared to $23.9 million
in the prior year period, an increase of approximately 17%.
- Total revenues of $29.4 million, compared to total revenues of
$25.5 million in the prior year period.
- Net loss of $3.0 million, or $(0.04) per diluted share,
compared to net loss of $4.0 million, or $(0.05) per diluted share,
in the prior year period.
- Adjusted EBITDA of $0.5 million, compared to $(1.3) million in
the prior year period.
- Adjusted net loss was $2.0 million, or $(0.03) per diluted
share, compared to adjusted net loss of $3.2 million, or $(0.04)
per diluted share, in the prior year period.
Second Quarter 2024 Results
Healthcare revenues in the second quarter of 2024 were $27.9
million, an increase of approximately 17% from $23.9 million in the
prior year period. Total revenues in the second quarter were $29.4
million, an increase of 15% from total revenues of $25.5 million in
the prior year period. Within healthcare, claims-based services
revenue in the second quarter of 2024 was $13.7 million, while
revenue from eligibility-based services in the second quarter was
$14.3 million.
“Our healthcare revenue once again enjoyed strong double-digit
year over year growth, driven by an increase in commercial client
implementations and the continued ramp under our CMS RAC Region 2
contract," stated Simeon Kohl, CEO of Performant. "We continue to
fuel future growth with 10 commercial implementations in the second
quarter. We have implemented 20 commercial programs during 2024,
which are estimated to contribute approximately $9 million in
revenue at annualized steady state. Our larger initiatives to drive
efficiency and productivity are progressing as planned, with
positive early results. We remain committed to delivering
innovative solutions and long-term value to our clients and
stakeholders. I am pleased with the results we have driven in the
first half of the year and the progress made on our operational and
organization initiatives," Kohl further remarked.
Revenues from our customer care / outsourced services in the
second quarter were $1.4 million, down from $1.5 million in the
prior year period.
Net loss for the second quarter was $3.0 million, or $(0.04) per
diluted share, compared to a net loss of $4.0 million, or $(0.05)
per diluted share, in the prior year period. Adjusted EBITDA for
the second quarter was $0.5 million as compared to $(1.3) million
in the prior year period. Adjusted net loss for the second quarter
was $2.0 million, or $(0.03) per share on a diluted basis, compared
to adjusted net loss of $3.2 million, or $(0.04) per diluted share,
in the prior year period.
“The strong results we delivered in the second quarter and first
half of the year are a testament to the growth of our
organization,” said Rohit Ramchandani, Chief Financial Officer. “We
delivered strong revenue and profitability, fueled future growth
with double-digit implementations, and simultaneously invested in
efficiency initiatives. With second quarter results ahead of
expectations, we are encouraged to reiterate our expectation of
2024 healthcare revenues in the range of $117 million to $122
million, total Company revenues to be in the range of $124 million
to $129 million, and adjusted EBITDA in the range of $4 million to
$5 million," Ramchandani further commented.
Note Regarding Use of Non-GAAP Financial Measures
In this press release, to supplement our consolidated financial
statements, the Company presents adjusted EBITDA, adjusted net
income (loss), and adjusted net income (loss) per diluted share.
These measures are not in accordance with accounting principles
generally accepted in the United States of America (US GAAP) and
accordingly reconciliations of adjusted EBITDA and adjusted net
income (loss) to net income (loss) determined in accordance with US
GAAP are included in the “Reconciliation of Non-GAAP Results” table
at the end of this press release. We have included adjusted EBITDA
and adjusted net income (loss) in this press release because they
are key measures used by our management and board of directors to
understand and evaluate our core operating performance and trends
and to prepare and approve our annual budget. Accordingly, we
believe that adjusted EBITDA and adjusted net income (loss) provide
useful information to investors and analysts in understanding and
evaluating our operating results in the same manner as our
management and board of directors. Our use of adjusted EBITDA and
adjusted net income (loss) has limitations as an analytical tool
and should not be considered in isolation or as a substitute for
analysis of our results as reported under US GAAP. In particular,
many of the adjustments to our US GAAP financial measures reflect
the exclusion of items, specifically interest, tax, and
depreciation and amortization expenses, equity-based compensation
expense and certain other non-operating expenses, that are
recurring and will be reflected in our financial results for the
foreseeable future. In addition, these measures may be calculated
differently from similarly titled non-GAAP financial measures used
by other companies, limiting their usefulness for comparison
purposes. In regard to forward looking non-GAAP guidance, we are
not able to reconcile the forward-looking non-GAAP adjusted EBITDA
measure to the closest corresponding GAAP measure without
unreasonable efforts because we are unable to predict the ultimate
outcome of certain significant items. These items include, but are
not limited to, impacts associated with interest expense, and
depreciation and amortization expenses.
Earnings Conference Call
The Company will hold a conference call to discuss its second
quarter 2024 results today at 5:00 p.m. Eastern. A live webcast of
the call may be accessed on the Investor Relations section of the
Company’s website at investors.performantcorp.com. To dial into the
call you can dial 877-737-7051 or 201-689-8878 or preregister
through the below link. After registering, all telephone
participants will receive a confirmation email detailing how to
join the conference call, including the dial-in number along with a
unique passcode and registrant ID that can be used to access the
call.
A replay of the call will be available on the Company's website
or by dialing 844-512-2921 (domestic) or 412-317-6671
(international) and entering the passcode 13747328. The telephonic
replay will be available approximately three hours after the call,
through August 14, 2024.
About Performant Healthcare Solutions
Performant supports healthcare payers in identifying,
preventing, and recovering waste and improper payments by
leveraging advanced technology, analytics and proprietary data
assets. Performant works with leading national and regional
healthcare payers to provide eligibility-based, also known as
coordination-of-benefits (COB) services, as well as claims-based
services, which includes the audit and identification of improperly
paid claims. Performant is a leading provider of these services in
both government and commercial healthcare markets. Performant also
provides advanced reporting capabilities, support services,
customer care, and stakeholder training programs designed to
mitigate future instances of improper payments.
To learn more, please visit http://www.performanthealth.com
Forward Looking Statements
This press release contains certain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995, including statements regarding the Company's outlook for
revenues, net income (loss), adjusted EBITDA in 2024 and beyond,
our commercial client growth strategy, our estimated revenue from
commercial programs implemented in the first half of 2024, and the
expected benefits of the RecordsOne technology asset acquisition.
These forward-looking statements are based on current expectations,
estimates, assumptions, and projections that are subject to change
and actual results may differ materially from the forward-looking
statements. Factors that could cause actual results to differ
materially include, but are not limited to, the Company’s ability
to generate revenue following long implementation periods
associated with new customer contracts; client relationships and
the Company’s ability to maintain such client relationships; many
of the Company’s customer contracts are subject to periodic
renewal, are not exclusive, do not provide for committed business
volumes; anticipated trends and challenges in the Company’s
business and competition in the markets in which it operates; the
Company’s indebtedness and compliance, or failure to comply, with
restrictive covenants in the Company’s credit agreement;
opportunities and expectations for growth in the various markets in
which the Company operates; the Company’s ability to hire and
retain employees with specialized skills that are required for its
healthcare business; downturns in domestic or global economic
conditions and other macroeconomic factors; the Company’s ability
to generate sufficient cash flows to fund our ongoing operations
and other liquidity needs; the impact of public health pandemics
such as COVID-19 on the Company’s business and operations,
opportunities and expectations for the markets in which the Company
operates; the impacts of a failure of the Company’s operating
systems or technology infrastructure or those of third-party
vendors and subcontractors; the impacts of a cybersecurity breach
or related incident to the Company or any of the Company’s
third-party vendors and subcontractors; the adaptability of the
Company’s technology platform to new markets and processes; the
Company’s ability to invest in and utilize our data and analytics
capabilities to expand its capabilities; the Company’s growth
strategy of expanding in existing markets and considering strategic
alliances or acquisitions; the Company’s ability to maintain,
protect and enhance its intellectual property; expectations
regarding future expenses; expected future financial performance;
and the Company’s ability to comply with and adapt to industry
regulations and compliance demands.
More information on potential factors that could affect the
Company's financial condition and operating results is included
from time to time in the "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" sections of the Company's annual report on Form 10-K
for the year ended December 31, 2023 and subsequently filed reports
on Forms 10-Q and 8-K. The forward-looking statements are made as
of the date of this press release and the Company does not
undertake to update any forward-looking statements to conform these
statements to actual results or revised expectations.
PERFORMANT FINANCIAL
CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands, except par value
amounts)
June 30, 2024
December 31,
2023
(Unaudited)
Assets
Current assets:
Cash and cash equivalents
$
10,424
$
7,252
Restricted cash
—
81
Trade accounts receivable, net of
allowance for credit losses
14,070
17,584
Contract assets
9,928
10,879
Prepaid expenses and other current
assets
3,610
3,651
Income tax receivable
106
335
Total current assets
38,138
39,782
Property, equipment, and software, net
14,685
9,724
Goodwill
47,372
47,372
Debt issuance costs
531
631
Right-of-use assets
935
531
Other assets
776
990
Total assets
$
102,437
$
99,030
Liabilities and Stockholders’
Equity
Current liabilities:
Accrued salaries and benefits
8,337
7,924
Accounts payable
888
727
Other current liabilities
1,868
2,385
Contract liabilities
848
493
Estimated liability for appeals and
disputes
1,223
601
Deferred asset acquisition payments
723
—
Lease liabilities
485
250
Total current liabilities
14,372
12,380
Long-term loan payable
8,000
5,000
Deferred asset acquisition payments
3,068
—
Lease liabilities
467
295
Other liabilities
664
648
Total liabilities
26,571
18,323
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.0001 par value.
Authorized, 500,000 shares at June 30, 2024 and December 31, 2023
respectively; issued and outstanding 77,190 and 76,920 shares at
June 30, 2024 and December 31, 2023, respectively
8
8
Additional paid-in capital
148,173
146,001
Accumulated deficit
(72,315
)
(65,302
)
Total stockholders’ equity
75,866
80,707
Total liabilities and stockholders’
equity
$
102,437
$
99,030
PERFORMANT FINANCIAL
CORPORATION AND SUBSIDIARIES
Consolidated Statements of
Operations
(In thousands, except per share
amounts)
(Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Revenues
$
29,362
$
25,485
$
56,696
$
51,214
Operating expenses:
Salaries and benefits
24,534
21,710
47,755
44,159
Other operating expenses
7,569
7,376
15,603
14,445
Total operating expenses
32,103
29,086
63,358
58,604
Loss from operations
(2,741
)
(3,601
)
(6,662
)
(7,390
)
Gain on sale of certain recovery
contracts
—
—
—
3
Interest expense
(300
)
(351
)
(486
)
(765
)
Interest income
61
—
167
—
Loss before provision for income taxes
(2,980
)
(3,952
)
(6,981
)
(8,152
)
Provision for income taxes
16
21
32
42
Net loss
$
(2,996
)
$
(3,973
)
$
(7,013
)
$
(8,194
)
Net loss per share
Basic
$
(0.04
)
$
(0.05
)
$
(0.09
)
$
(0.11
)
Diluted
$
(0.04
)
$
(0.05
)
$
(0.09
)
$
(0.11
)
Weighted average shares
Basic
76,975
75,752
76,925
75,629
Diluted
76,975
75,752
76,925
75,629
PERFORMANT FINANCIAL
CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash
Flows
(In thousands)
(Unaudited)
Six Months Ended June
30,
2024
2023
Cash flows from operating
activities:
Net loss
$
(7,013
)
$
(8,194
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Loss on disposal of assets
29
36
Depreciation and amortization
3,317
2,512
Right-of-use assets amortization
224
1,455
Stock-based compensation
2,262
1,686
Interest expense from debt issuance
costs
115
122
Gain on sale of certain recovery
contracts
—
(3
)
Changes in operating assets and
liabilities:
Trade accounts receivable
3,514
3,004
Contract assets
951
4,513
Prepaid expenses and other current
assets
41
683
Income tax receivable
229
(53
)
Other assets
208
25
Accrued salaries and benefits
413
(820
)
Accounts payable
161
(67
)
Contract liabilities and other current
liabilities
(162
)
(658
)
Estimated liability for appeals and
disputes
622
(299
)
Lease liabilities
(221
)
(1,691
)
Other liabilities
16
14
Net cash provided by operating
activities
4,706
2,265
Cash flows from investing
activities:
Purchase of property, equipment, and
software
(4,510
)
(2,339
)
Proceeds from sale of certain recovery
contracts
—
3
Net cash used in investing activities
(4,510
)
(2,336
)
Cash flows from financing
activities:
Repayment of long-term loan payable
—
(8,000
)
Debt issuance costs paid
(15
)
(274
)
Taxes paid related to net share settlement
of stock awards
(90
)
(57
)
Borrowings from revolving loan
3,000
—
Net cash provided by (used in) financing
activities
2,895
(8,331
)
Net increase (decrease) in cash, cash
equivalents and restricted cash
3,091
(8,402
)
Cash, cash equivalents and restricted cash
at beginning of period
7,333
23,465
Cash, cash equivalents and restricted cash
at end of period
$
10,424
$
15,063
Reconciliation of the Consolidated
Statements of Cash Flows to the
Consolidated Balance Sheets:
Cash and cash equivalents
$
10,424
$
14,982
Restricted cash
—
81
Total cash, cash equivalents and
restricted cash at end of period
$
10,424
$
15,063
Non-cash investing activities:
Deferred asset acquisition payments
$
3,791
$
—
Supplemental disclosures of cash flow
information:
Cash (received) paid for income taxes
$
(151
)
$
143
Cash paid for interest
$
252
$
721
PERFORMANT FINANCIAL
CORPORATION AND SUBSIDIARIES
Reconciliation of Non-GAAP
Results
(In thousands, except per share
amount)
(Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
(in thousands)
(in thousands)
Adjusted EBITDA:
Net income (loss)
$
(2,996
)
$
(3,973
)
$
(7,013
)
$
(8,194
)
Provision for income taxes
16
21
32
42
Interest expense (1)
300
351
486
765
Interest income
(61
)
—
(167
)
—
Stock-based compensation
1,305
888
2,262
1,686
Depreciation and amortization
1,919
1,265
3,317
2,512
Severance expenses (3)
50
119
386
182
Other
15
30
15
29
Adjusted EBITDA
$
548
$
(1,299
)
$
(682
)
$
(2,978
)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
(in thousands)
(in thousands)
Adjusted Net Income (Loss):
Net income (loss)
$
(2,996
)
$
(3,973
)
$
(7,013
)
$
(8,194
)
Stock-based compensation
1,305
888
2,262
1,686
Amortization of debt issuance costs
(2)
57
87
115
122
Severance expenses (3)
50
119
386
182
Other
15
30
15
29
Tax adjustments (4)
(393
)
(309
)
(764
)
(555
)
Adjusted net income (loss)
$
(1,962
)
$
(3,158
)
$
(4,999
)
$
(6,730
)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
(in thousands)
(in thousands)
Adjusted Net Income (Loss) Per Diluted
Share:
Net income (loss)
$
(2,996
)
$
(3,973
)
$
(7,013
)
$
(8,194
)
Plus: Adjustment items per reconciliation
of adjusted net income (loss)
1,034
815
2,014
1,464
Adjusted net income (loss)
$
(1,962
)
$
(3,158
)
$
(4,999
)
$
(6,730
)
Adjusted net income (loss) per diluted
share
$
(0.03
)
$
(0.04
)
$
(0.06
)
$
(0.09
)
Diluted average shares outstanding
76,975
75,752
76,925
75,629
(1)
Represents interest expense and
amortization of debt issuance costs related to our Credit
Agreement.
(2)
Represents amortization of debt issuance
costs related to our Credit Agreement.
(3)
Represents severance expenses incurred in
connection with a reduction in force for our non-healthcare
recovery services.
(4)
Represents tax adjustments assuming a
marginal tax rate of 27.5% at full profitability.
PERFORMANT FINANCIAL CORPORATION AND
SUBSIDIARIES Quarterly and Annual Revenues (In thousands)
(Unaudited)
We are providing the following historical breakdown of the
quarterly and annual revenue contributions under the contribution
breakdowns of our healthcare revenue results for the six months
ended June 30, 2024, and for the years ended December 31, 2023 and
2022:
Three Months Ended
Six Months Ended
March 31, 2024
June 30, 2024
June 30, 2024
(in thousands)
Eligibility-based
$
13,388
$
14,264
$
27,652
Claims-based
12,412
13,661
26,073
Healthcare Total
25,800
27,925
53,725
Customer Care / Outsourced Services
1,534
1,437
2,971
Total
$
27,334
$
29,362
$
56,696
Three Months Ended
Year Ended
March 31, 2023
June 30, 2023
September 30, 2023
December 31, 2023
December 31, 2023
(in thousands)
Eligibility-based
$
12,480
$
14,131
$
18,165
$
16,403
$
61,179
Claims-based
10,412
9,798
10,325
14,730
45,265
Healthcare Total
22,892
23,929
28,490
31,133
106,444
Recovery
19
14
—
33
Customer Care / Outsourced Services
2,818
1,542
1,472
1,434
7,266
Total
$
25,729
$
25,485
$
29,962
$
32,567
$
113,743
Three Months Ended
Year Ended
March 31, 2022
June 30, 2022
September 30, 2022
December 31, 2022
December 31, 2022
(in thousands)
Eligibility-based
$
14,214
$
12,417
$
13,142
$
13,511
$
53,284
Claims-based
9,150
9,339
10,377
12,516
41,382
Healthcare Total
23,364
21,756
23,519
26,027
94,666
Recovery
118
7
41
75
241
Customer Care / Outsourced Services
3,601
3,918
3,618
3,140
14,277
Total
$
27,083
$
25,681
$
27,178
$
29,242
$
109,184
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240807227296/en/
Jon Bozzuto Investor Relations 925-960-4988
investors@performantcorp.com
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